John A. Ford & Associates Inc. v. Keegan, 2007 ONCA 510
COURT OF APPEAL FOR ONTARIO
O’CONNOR A.C.J.O., ARMSTRONG and BLAIR JJ.A.
BETWEEN:
JOHN A. FORD & ASSOCIATES INC. o/a TRAINING SERVICES
Plaintiff (Respondent)
and
FRANK M. KEEGAN and 1253308 ONTARIO LTD.
Defendants (Appellants)
Counsel:
Angela Assuras for the appellants
James S.G. Macdonald for the respondent
Heard and orally released: June 29, 2007
On appeal from the order of Justice John D. Ground of the Superior Court of Justice dated February 16, 2007.
ENDORSEMENT
1The respondent sued the appellants for damages for breach of contract, breach of fiduciary duty and other related relief. The appellants counterclaimed.
2By Minutes of Settlement, the appellants agreed to pay the respondent $35,000 and the action and counterclaim were to be dismissed. The appellants failed to pay the $35,000 and subsequently the appellant, Keegan, filed for bankruptcy.
3The respondent sought two orders by way of notice of motion: a) a declaration that the appellants had repudiated the Minutes of Settlement by failing to pay $35,000 and that the repudiation had been accepted; and b) a declaration that the stay in the bankruptcy proceedings be lifted and the respondent be allowed to continue his action.
4The motion judge made a declaration that the Minutes of Settlement had been repudiated. We are satisfied that he erred in making this declaration only because the relief was sought by way of a motion rather than by an application or action. The relief was not sought within an existing proceeding and thus, the respondent should have instituted the claim by way of originating process.
5The motion judge also made an order that the stay in the bankruptcy proceedings be lifted and the respondent’s action allowed to continue. This relief was sought as part of the bankruptcy proceedings and thus was properly raised by way of notice of motion.
6We are of the view that the motion judge did not err in ordering that the stay be lifted and allowing the action to continue.
7The Minutes of Settlement should not constitute a bar to the continuation of the action. Although the motion judge decided that the Minutes of Settlement had been repudiated in the context of the request for a declaration to that effect, there is no reason to think that the motion judge would not have reached the same conclusion in deciding the issue in the context of a motion to lift the stay and continue the action.
8We are satisfied that in reaching the conclusion that there had been repudiation, the motion judge applied the proper legal principles and correctly applied the facts to those principles. We see no basis to interfere with this conclusion.
9We are also satisfied that given the nature of the claims made in the action, it was open to the motion judge to make the order continuing the action.
10In the result, the appeal against the order lifting the stay and continuing the action is dismissed. The appeal against the declaration that the Minutes of Settlement had been repudiated is allowed and that declaration is quashed.
11We award costs of the appeal, including the motion in this court, to the respondent and fix them in the amount of $4,000,inclusive of disbursements and GST.
“Dennis O’Connor A.C.J.O.”
“Robert P. Armstrong J.A.”
“R.A. Blair J.A.”